Gunns has lashed out at the Greens after New Zealand-born billionaire Richard Chandler decided against investing $150 million in the company, jeopardising the future of the woodchipper.

Gunns chief executive Greg L’Estrange told BusinessDay that Mr Chandler’s proposed $150 million investment had been subject to due diligence and Gunns had received notice at 2am this morning that Richard Chandler Corporation would not be proceeding with its investment, and had put its shares into a trading halt.

The investment was to have been part of a proposed $280 million capital raising for Gunns that would have given RCC a cornerstone stake in the woodchipper. Gunns had announced the $150 million placement of securities to RCC and the $130 million rights issue on February 8.

Pulling out ... Richard Chandler. Photo: Bloomberg

Mr L’Estrange blamed continued Greens’ opposition to Gunns’ $2.5 billion pulp mill in the Tamar Valley for Mr Chandler’s to pull out, describing it as “disappointing” given the lengthy negotiations towards a native forests peace deal in Tasmania over the past two years.

Gunns was a key catalyst for the peace talks after it declared in late 2010 it would exit native forest logging.

“It’s disappointing for Tasmania,” he said. “Disappointing that the project is still subject to ongoing mischievous protest at a local and a political level.

“We’ve been on this journey for the last two years, working toward a resolution of this long-term conflict in Australia, and being the solver of that problem, moving the industry to what the Greens always said they wanted – a plantation-based industry. This type of mischievous behaviour has to stop.

“The development does have to go ahead. This is a project that the vast majority of Tasmanians do want to go ahead.”

Gunns has suffered from falling prices for its woodchip and has staked its future on the value-adding pulp mill project.

“If the project doesn’t go ahead I’m not sure where the company will end up,” Mr L’Estrange said this morning. "The pulp mill project is a valuable asset. A 150,000 hectare plantation with a permitted pulp mill. No further approvals are required. The project will be a reality, whether with Gunns or somebody else.”

Mr L’Estrange said the Tamar Valley pulp mill was in the top quartile of cost-competitiveness worldwide.

Mr L’Estrange said a small number of parliamentary Greens were opposed to any kind of development, and pointed to this week’s revelations of a campaign against the coal industry.

“See where they’re going with the coal sector now? We were the first,” he said.

Mr L’Estrange said Gunns had been supported to date by existing shareholders although they would have been diluted by the deal with Mr Chandler. He said Gunns could seek another cornerstone investor, or existing shareholders may be willing to contribute more given they faced less dilution.

Gunns shares last traded at 16 cents. The shares have lost more than 70 per cent of their value over the past 12 months, as investors fret over the future of the company.